YISSEL ABREU REYES 2156886

BENCHMARKING COCA-COLA

The birth of Pepsi in 1893 posed the biggest competition problem for the
most refreshing company in the U.S., Coca Cola. Although the beginnings for Pepsi
they were not positive at all, after two consecutive bankruptcies the company was acquired
by a Coca Cola distributor, who managed to stand up to his predecessor

Pepsi started an aggressive attitude, increasing the amounts of product and

reducing prices compared to Coca Cola, increasing their sales. But a
new rise in sugar prices complicated the existence of Pepsi, whose image
it was the one of 'the tail of the poor'. However, its resurgence came from Coca itself.
Cola, its vice president took charge of the company with a more aggressive attitude.
that they allowed him in his previous company. Pepsi managed to regain market share.
changing its positioning thanks to unifying its flavor and aggressive
advertising strategy.

However, the power of Coca Cola continued to prevail in the U.S., and in states such as
In Texas, the share of Pepsi barely exceeded 7%. Pepsi took advantage of the error to
launch a campaign illustrating why Coca Cola had changed its
formula, the reason, something amazing, the taste of Pepsi. American society
the return of the original flavor was demanded, and it was rectified, giving birth to Classic Coke.

GENERAL COMPANY DATA

COCA COLA

The Coca-Cola Company is the leading company in the global non-alcoholic beverage industry.
alcoholic beverages. The company has its headquarters in Atlanta (Georgia), and along
its subsidiaries employ almost 30,000 people around the world, according to
sources of the company itself.

It is dedicated to the manufacture of syrups, concentrates, and Coca-Cola, the brand.

company star, in addition to another 160 brands that are manufactured and sold
by The Coca-Cola Company and its subsidiaries in almost 200 countries around the
world. In fact, 70% of sales volume and 80% of profits of the
company comes from outside the U.S.

The company's mission is to exist to create value for its shareholders at the base.
of the long term building a business that strengthens The Coca-Cola brands
Company. This is done by developing soft drinks, carbonated and non-carbonated.
carbonated, and beneficial non-alcoholic beverage systems that create value
for the company, its bottling partners, its customers, its shareholders and the
communities in which the company develops its business.
 PEPSICO

PepsiCo is a leading international company in the food sector and the

drinks, which are present in more than 200 countries, with sales exceeding 35
billions of dollars and more than 168,000 employees. The company was founded in 1965 at
starting from the merger of Pepsi-Cola Company and Frito-Lay. The company presents three
divisions:

Pepsico Americas Beverages for the entire American continent.

Pepsico Americas Foods

Pepsico International for Europe, Asia, Africa and Australia

The main brands that Pepsico markets are: Pepsi beverages, snacks
FritoLay (such as Lay’s, Ruffles, Doritos, or Sunbites), Tropicana juices, drinks
Gatorade and Quaker cereals.

The origin of the company dates back to the early 1890s when a
pharmacist in New Bern (North Carolina) created the soda Brad's Drink to
compete against its great rival, Coca-Cola. In 1898 it changed to the current name and
registered as a trademark in 1903. In 1931, Pepsi Cola was bought by the
Loft Candy company and the drink was reformulated with new ingredients.

COCA COLA MARKETING STRATEGY

STRATEGIC MARKETING

Coca-Cola, as a major established brand, has a perfect internal analysis and

external to your company, as well as a good study and research of the market
where it has sought to position itself over time.

Your SWOT analysis could be as follows;

FORTALEZAS DEBILIDADES

• Existence in the market for over a century.

• Operates in more than 200 countries
• It practically has 85% of the market share in cola beverages.
• The Coca Cola Company is the most recognized brand in the world. The contract
that Coca-Cola maintains with its bottling companies is under
constant change

OPORTUNIDADES AMENAZAS

• It has sufficient capital to continue expanding

 • It has great innovative potential that keeps its products with
competitive advantage
• It can emerge with other global businesses that eliminate competitors.
• Tiene competidores globales, el principal PepsiCo.
• Coca-Cola can be replaced by other drinks made by its competitors.
• These competitors can develop powerful marketing strategies.
that affect the company
• In the business cycle, an economic recession may occur.

After reviewing this analysis and focusing on the brand's evolution, it can
it can be inferred that Coca Cola is the clear example of a marketing strategy focused on
total market, specifically an example of differential marketing, as it has
different types of "Coke" to adapt to different segments of
market, therefore its target audience varies from one formula to another.

Examples:

Coca Cola: Universal drink that transcends all cultures.

Coca Cola Light: A suitable drink for people who want to feel good, focused
to an audience between 25 and 39 years old

Coca Cola Light Without caffeine: Focused on an adult audience that values
feeling good, they have an active and dynamic lifestyle.

Caffeine-free Coca Cola: Favorite drink of children who enjoy a

fun drink without caffeine at any time of the day. Therefore, the containers and the
Caffeine-free Coca Cola advertisements are designed to be appealing to parents.
and children

Thanks to these marketing strategies, Coca Cola has a positioning

global; Always Coca Cola. At any time, anywhere it can be
drink Coca Cola; at home to eat with two-liter bottles, in a bar, in the
beach, alone or mixed; in all cases, the people who drink the product are
healthy, cheerful, dynamic, musical, original, handsome, desired, the
The important thing is the atmosphere of friendship that is created; customers want to identify themselves.
with the product.

PEPSICO STRATEGY

Target audience

A goal for any company is to select its Target Audience.

to impact through their marketing-mix actions; for that, it is necessary
to have a deep understanding of the consumer.

Based on the data obtained about the evolution of buying and consumption habits
in Spain prepared by Víctor J. Martín Cerdeño for the Ministry of the Environment
Environment and Rural and Marine Area (at the time of the study Ministry of
Agriculture, Fishing and Food through the General Directorate of Industry
Agri-food and Food) it can be inferred that the highest consumption of
refreshing drinks are produced among independent young people, couples
young people without children, couples with older children, and single-parent households.
An important evolution in the consumption of these beverages is also observed.
refreshing in the last two decades, going from 57 liters of soft drinks and beverages
refreshing beverages per person and year in 1987 to 66 liters in 2007. We can also
to deduce that the consumption structure has changed considerably in that
period, as the consumption in households has evolved from 50% in
1987 at 63% in 2007. Likewise, if we observe the new approach of recent years.
Pepsi campaigns reflect the alignment with experiences and different styles.
life of today's young consumer.

With these prior considerations, it can be deduced who the target is aimed at.
The products of Pepsi-Cola are fundamentally targeted at consumers.
young people (aged 15 to 21) who are looking to discover, connect, and personalize their
world.

Another aspect to highlight when identifying Pepsi's target is observed when looking at
the company's contributions to homosexual activism associations, while
its main competitor bets on presenting endearing family images.
We can deduce that Pepsi has found potential in the gay target.
consumer.

If we take into account the current demographic situation, specifically in Spain, the
population aging will increase the number of adults and retirees
increase. Therefore, it would be interesting for the brand to retain the current ones.
consumers (young people) when they change age segment.

Positioning

Positioning can be understood as the perception that the consumer has.

of a brand in relation to the competition due to a marketing strategy-
mix.

The company Pepsico has a highly diversified business maintaining its

leadership in some of its divisions, for example in snacks. However, if
we focus on the main object of this study, refreshing beverages,
especially of cola, the supremacy of its main competitor Coca-Cola has been
a constant throughout its history.

The marketing strategy at Pepsico has been based on the introduction of

products with some characteristic different from that of their main competitor,
Coca-Cola. In the early years, it managed to offer its products at a lower price.
that Coca-Cola thanks to the use of recycled beer bottles for the
containers. In 1964, Pepsi-Cola launched the first low-calorie cola (Diet). In the 90s
Pepsico outpaces Coca-Cola in launching a new beverage to the market
gas-free, healthy and wholesome (RADICAL) that maintained an 82% market share against
Fruitopia (Coca-Cola) reached 18%. Pepsi has positioned itself differently.
ways in the market:

Positioning according to competitor characteristics. Product comparison

with its main competitor in order to take away customers from them. In fact, it is
known the television advertisement of a direct attack on the competition in which two
transporters, one from "Pepsi" and another from "Coca-Cola" meet in a bar of
road and they test the product of their colleague transporter... the Coca distributor
Cola refused to return his Pepsi after tasting it.

Positioning according to characteristics contrary to those of the competition, 'Pepsi'

chose the slogan "Are you crazy?... drink Pepsi" against the positioning of "Coca-Cola"
from 'the flavor of always' to target a young, rebellious consumer
innovative. In fact, Pepsi's new positioning represents the values of
dynamism and permanent change that connects with the present and anticipates the
future. Currently, we are observing a change in the brand logo.
in the new containers that will include new designs of different themes
related to the experiences and lifestyles of consumers.

MARKETING MIX

The marketing mix can be defined as the set of marketing tools.

what companies use to achieve their business objectives in relation to
a target audience.

Decisions about the product

As mentioned earlier, the company Pepsico is divided into

Pepsico Americas Beverages, Pepsico Americas Foods, and Pepsico International
markets different brands of non-carbonated beverages (such as Gatorade,
Tropicana, and mainly the object of this study "Pepsi") as well as others
products (Lay’s, Ruffles, Doritos, Alvalle,...).

Regarding refreshing beverage products, we observe two trends in

the brand strategies:

The multiple brand strategy involves putting different brands on products.

of the company and allows us a better positioning of the product by addressing
the characteristics and perceptions detected in the analysis of the segments
studied. Thus the company offers different brands such as Gatorade, Radical,
Pepsi, Seven Up, Kas, Mirinda, Aquafina. In this sense, there is currently a
focus on a healthier product offering to meet the
needs of the current consumer that demand this type of products.

On the other hand, the company uses a unique brand to market all the
cola drinks. Currently, it markets: Pepsi, Pepsi Max, Pepsi Light and
Pepsi lemon. Since 2008 (in Mexico) and since last April in the United States.
United Pepsi has launched a Pepsi for the most nostalgic. With the name of
Pepsi Throwback, ("Pepsi Retro" in Mexico) its packaging recalls the designs
from the seventies and its preparation includes real sugar (currently a
compound known as HFCS) as it was done forty years ago.

The company has announced the launch of new vending machines that
they use CO2 as a refrigerant instead of hydrofluorocarbons that emit a 12
% less greenhouse gases. On this same path, it is also trying with
other "green" refrigerants such as isobutane and propane

Decisions about distribution

The company's objective is to use a short distribution channel that eliminates

part of the distribution chain delivering products to retailers or
distribution centers directly linking with professionals of the
hospitality and with retail vendors.

Pepsi-Cola distributes its products after bottling processes to

through other companies. Currently, Pepsico has launched a buy offer to
its two main bottling companies (Pepsi Bottling Group and
PepsiAmericas to gain a competitive advantage over Coca-Cola.

Recently, the company Pepsico in Spain has reached an agreement with the
distribution chain Mercadona to sell its products in some of its
supermarkets. This experience will initially be developed in some
Andalusian provinces, and based on the results obtained, it will be extended to the rest.
from Spain.

In the case of the distribution of refreshing products, it is interesting to comment on the

use of vending machines installed in public institutions, schools,
hospitals, etc. that represent a way to reach the consumer in any
schedule and geographical point

Decisions about the price

As we discussed in the company presentation, one of the first

Pepsi's identity markers were to offer its product at a price lower than that of its
main competitor. In fact, for years the product was identified as "the
"soft drink of the poor." Although nowadays it is no longer the main objective of the
The company does indeed try to maintain a price slightly lower than that of Coca-Cola,
for example, at Carrefour, cans of Coca-Cola cost 0.50 euros, compared to
0.45 euros for Pepsi, while the two-liter bottles of Pepsi are 12.5%
cheaper than those of the Atlanta giant

Decisions about communication

Advertising has become one of the most important pillars of the system.
of the company's communication.

As we have mentioned before, some announcements have moved to the

history as examples of comparative advertising with its main competitor
Coca-Cola (advertisement of the truck drivers distributing the sodas trying the
of its competitor). Although in Spain the use of brands and logos of a
competitors are considered unfair competition and are illegal Pepsi also tried
to evade legislation thanks to a Paraguay-Spain match in the Football World Cup
2002, Chilavert, the Paraguayan goalkeeper, taunted the players for days,
Spanish journalists and fans... finally the Spanish National Team won 3-1 and
Pepsi, official sponsor of the Spanish National Team, decided to give a lesson to
Coca Cola, sponsor of Paraguay, creating a graphic advertisement to give the
congratulations to the Spanish fans and humiliate the goalkeeper. The announcement
showed the Coca Cola typography for writing Paraguay and that of Pepsi for
write Spain.

We previously discussed the launch of a Pepsi for the youngest.

nostalgic "Pepsi-Throwback". To promote this new product, Pepsi has
used retro style spots aired on Hulu, new Internet phenomenon
where videos with audiovisual content from the major networks are shown
American television. For the brand's marketing director in the United States.
Together, Ana María Irazabal, "young people are eager for this type of content."
Things from the past are not old to them; they consider them new because they never
they had seen them.

Alongside these creative and innovative campaigns, Pepsi uses promotion

sales that encourage purchases with contests, discount vouchers, prizes, gifts,
etc. like the promotion "Show Your Face," with which Pepsi sought to get closer to the
young people through an online contest in which by sending a photograph
they could appear on Pepsi can packaging. 10,000 young people participated without
log out of your computer desk.

"Date bombo" is the name of the current promotion, which this time features
collaboration of Springfield where consumers will be able to obtain garments
as a gift, discounts in their stores, as well as the possibility of appearing in various
media of the 40 Principales, a clear experience of co-marketing. The center of the
promotion is a contest on the website [Link]. Pepsi has created the
Facebook Connect application for users to gather more votes for
through this social network.

That is to say, Pepsi conducts advertising campaigns that attract its potential customers.
consumers using the most effective means for it (means of
traditional communication, own websites, social networks, sponsorship of
sports teams, sponsor of associations like YMCA ...

COMPARATIVE ANALYSIS OF STRATEGIES

We can say that the marketing strategy pursued by both brands presents
similarities in many aspects, but in others it is visibly different.

The target audience is different: while Coca-Cola seeks to reach everyone

audience with different age segments, Pepsi-Cola leans towards some
fundamentally young consumers. Their positioning strategies
they also differ, while the first one has the main objective of transmitting
a familiar and happy environment the second tries to create a more
Transgressive and innovative, in tune with the desires of the new youth.

Regarding the product strategy, there are similarities and differences:

The Coca-Cola Company is a company dedicated to the non-alcoholic beverage industry.

alcoholic beverages while Pepsico in addition to the non-alcoholic beverage industry
also engages in snacks and cereals. Therefore, both companies have
decided by the multi-brand strategy.

Regarding cola soft drinks, both use the same brand with different
presentations (Coca-Cola and Pepsi-Cola) in cans and bottles of different sizes
capacity. The two companies use the product differentiation strategy
to retain consumers belonging to various market segments
launching new products (for example Coca-Cola vanilla or Pepsi Throwback),
different packages (fridge pack and retro pack) or new machines
vending machines (Coca-Cola allows purchases via SMS, ringtone downloads,
etc and Pepsi-Cola have introduced the first environmentally friendly vending machine.
environment using natural refrigerants that emit less
greenhouse gases.

The pricing policy is similar and although the prices of both products are
similar Pepsi-Cola tries to offer a significantly lower price than its
competitor.

The distribution channel used by both companies is similar using

intermediaries and an intensive distribution strategy to reach all the
points of sale. Pepsi-Cola has made agreements with a distribution company
mainly private label products to sell their products. In
Regarding the relationship with bottling companies, so far they depend on
external bottling companies; in the last month Pepsico has launched an offer
to purchase in order to have total control over bottling and packaging.

Regarding the communication strategy, both companies use campaigns

clever advertising through television, social media (Tuenti or
Facebook), YouTube, Hulu,... although the message they try to convey to their
potential consumers is very different.

Pepsi uses promotions with gifts, contests,... to a greater extent than Coca-
Cola, and in some cases associated with other companies.

Sponsorship is another form of advertising used by both companies.

being Coca-Cola the one that has won the battle many times by participating in
Olympic Games, World Cup soccer, etc. where the audience levels are
very high.

CONCLUSIONS
In general, the two companies have consistently worked between the two techniques.
benchmarking in order to improve its position by taking advantage of key factors
of competitive success and even improving these differentiations.

Pepsi or COCA COLA? both have large marketing departments that

they break down each technique to the maximum to apply it in their products and achieve
mark the little difference that will make sales increase the percentage
about its own brand and also about the other.

In any case, what really makes one preferred over the other is the one that
through its messages and advertising manages to positively stimulate the
emotional points of the brain. To create a successful brand, companies must
learn to understand what people "really want", and not what "seems"
what they want." Both Coca-Cola and Pepsi have learned this message and have
knowing how to apply it in their companies that despite being eternal competitors
they have managed to create strong barriers to entry that make them have
great monopoly on the consumption of cola drinks.